BBC cuts spending on TV, radio and online services but spends £72 million on
"communications" and £25 million on staff pay-offs, annual report says

The BBC spent almost £100 million last year on severance pay and “communication” costs at a time when programme budgets were being cut and audience appreciation falling.

The corporation also hired more people than it fired in 2013-14 despite repeated public pledges to become a more streamlined organisation.

And while overall expenditure on senior management fell over the past year, the number of managers on more than £220,000 per year increased.

The figures were contained in the BBC’s annual report. According to the director-general, Lord Hall, it documented a “fantastic year” for the corporation.

Nevertheless, he chose the occasion to announce the high-profile appointment of Evan Davis as the new host of Newsnight, which some interpreted as a diversionary tactic. The BBC chose the publication day of last year’s annual report to unveil Mishal Husain as a new signing to the Today programme.

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The BBC Trust strongly criticised management for hiring more staff at a time of cost efficiencies.

"Given that, up until this year, £153.3 million has been spent on restructuring, we have asked the Executive... to identify the appropriate number of staff required to deliver the BBC's objectives," the Trust said.

The total cost of severance deals last year was £25.6 million, while the marketing budget rose to £71.9 million.

Yet the costs remain high, and the report showed that 71 employees left last year with pay-offs of at least £100,000.

Twelve pay-offs exceeded £150,000. The BBC has brought in rules to cap severance packages at that figure, but said the 12 payments were “in the pipeline” before the new system came into effect.

Pay-offs for senior management staff accounted for £3.6 million of the total.

While programme budgets were cut, spending on “marketing, audiences and communication” (MCA) rose from £68.7 million in 2013 to £71.9 million in 2014.

The MCA team’s remit involves generating positive pubilcity for the corporation and includes year-round audience research. However, the latest research included in the report showed that “audience appreciation” for BBC television and radio channels has fallen for the first time in years.

Audiences now spend 18.5 hours a week with the BBC, compared to 19.5 hours last year.

Danny Cohen, the director of television, said: “I feel very, very confident in the quality of what we’re doing and that overall appreciation of our channels will grow.”

Spending on television channels fell from £2.47 billion in 2012-13 to £2.27 billion over the last year. Radio budgets were down from £670 million to £650 million, and the online budget from £177 million to £174 million.

The number of BBC staff paid out of licence fee funds rose from 16,534 in 2012-13 to 16,672 in 2013/14.

The BBC attributed the rise to the creation of new technology jobs and “additional staffing required to deliver key programmes and events such as the Commonwealth Games and our coverage of the Scottish referendum”.

Director-general Lord Hall earned a base salary of £450,000 with no bonus potential. His earnings are around 11 times that of the average BBC employee – the media salary of BBC employees is £41,284.

The wage bill for senior management fell from £437 million to £403 million, although the number of staff earning over £200,000 – excluding executive board members - went up from 14 to 15.

Presenters’ wages have fallen from a total of £200 million to just over £194 million over the past 12 months.

Yet the number of presenters who earn over £500,000, including Graham Norton and Gary Lineker, has remained the same at 14.

The BBC refused to identify its top earners, saying it wished “to protect the personal information of these individuals in line with data protection best practice”.

Lord Hall said the BBC had delivered annual savings of £374 million. Diane Coyle, acting head of the BBC Trust, said Lord Hall had "re-energised" the corporation after a period of controversy.

Justifying the BBC's increased spend on marketing and communications,a spokesman said the figure was higher than last year but lower than the year before.

"Our spend in this area is now lower than two years ago and is used to make audiences aware of new programmes and services," she said.